Washington, DC — Check My Ads Institute, an independent watchdog reshaping the digital adtech industry, has submitted a formal complaint to the Federal Trade Commission (FTC) urging an investigation into the advertising practices of X Corp., the operator of the online social media platform X (formerly Twitter).
The complaint highlights concerns about X Corp.’s lack of transparency in disclosing advertisements, leading to potential consumer deception and providing a breeding ground for scams. After losing a significant portion of its advertising revenue, X Corp. altered its labeling practices, making it challenging for users to distinguish between paid and organic content.
“X Corp.’s lack of disclosures to consumers, misrepresentations to advertisers, and flawed access to explanations about targeted advertising constitute unfair and deceptive practices. We urge the Commission to determine the extent of these violations and address them to the full extent of its authority,” said Sarah Kay Wiley, Policy Director of Check My Ads.
The complaint argues that X Corp.’s failure to adequately disclose advertisements misleads consumers into trusting content as organic, creating an environment ripe for scams. The lack of clear disclosure also leaves users unaware of being targeted with information and advertisements, violating Section 5 of the Federal Trade Commission Act. The complaint contends that X Corp.’s actions violate the terms of the 2022 Stipulated Order with the FTC, prohibiting misrepresentation of its advertising practices, a decree which saw them pay a fine of $150 million. Furthermore, Promotional materials for advertising products indicate a clear “Promoted” label, which is not consistently applied to users’ timelines. This misrepresentation not only harms advertisers’ expectations but exposes them to legal risks.
"Industry watchdog Check My Ads is petitioning the Federal Trade Commission to investigate X for unlabeled—and potentially misleading—advertisements." 💪💪💪https://t.co/db7EfBWPnc— Check My Ads (@CheckMyAdsHQ) November 15, 2023
The complaint also points out inconsistencies in X Corp.’s explanations of user targeting practices, hindering users from understanding the advertising targeting process. Broken hyperlinks and a lack of accessibility to information diminish transparency and hinder an informed user experience.
X Corp. primarily monetizes user information for advertising purposes. Since its acquisition by Elon Musk, the platform has undergone significant changes, including layoffs and alterations to its advertising targeting methods. The company’s revenue has suffered, losing 60% of advertising revenue, and a decline in user trust has led to a drop in valuation.
Check My Ads Institute calls for the FTC to investigate X Corp.’s violations and seek remedies, including:
- An injunction requiring X Corp. to provide a public database detailing all advertising on the platform, including information about who paid for the advertisements, how the ads were targeted, what ad networks placed the advertisements (if not X Corp.), and how advertisements were distinguished from organic content;
- An injunction for X Corp. to clearly label all advertisements
- Financial penalties per violation under the 2022 Administrative Order;
- An injunction requiring relinquishment of ill-gotten gains from misrepresentations made to users.
- Any other relief the Commission sees fit.
You can view the full complaint here: Check My Ads Complaint and Request for FTC Investigation Into X Advertising Practices on Scribd
Check My Ads Institute is an independent watchdog reshaping the digital adtech industry from within its ranks — and building a new sustainable standard in digital advertising.
We’re holding the surveillance adtech industry accountable for abuses against advertisers and consumers, and spearheading the development of a transparent, efficient and privacy-focused digital advertising marketplace.